Notably, the bank’s operating profits for the second quarter of 2011 were Rf 132,201,055 (US$8.57 million) in the second quarter of 2011 compared to Rf 79,872,266 (US$5.17 million) for the same period in 2010.
BML said in a statement that the total profits would be allocated to cover loan loss provisions in the second quarter of 2011. The bank will also not issue dividends to shareholders this year.
The bank also announced the launch of a business transformation programme that will see it evolve into a financial services institution “with a stronger focus on customers and service provision”.
International human resource consultancy firm Hunter Roberts, which has worked with major UK banks including Barclays, had been appointed to develop effective employee policies and provide staff development, BML said.
Speaking to Minivan News in April following his appointment, BML’s new CEO Peter Horton identified service provision as a particular area of improvement for the bank.
“I think this business grew very rapidly, not just the loan base but in terms of customers, especially if you look at what BML was 10 years ago,” he said at the time.
“That goes some way to explaining why we have such big queues in the banking hall. When I came out for my interview I took the time to walk around Male’ several times – and go in very incognito to see the BML branch. I have to experience what the customer experiences, and I don’t think that experience is what any of us want.”
Horton spent 15 years with Barclays in the UK before moving to Africa to run the bank’s corporate turnaround teams, where he became experienced in dealing with distressed portfolios and problem lending. Speaking to Minivan News in April, he identified BML’s high non-performing loan problem as a key impediment to the bank’s performance, noting that it not only had a carrying cost “but it also creates a certain mood around the business internally and externally.”
Horton also worked in the offshore finance field with a subsidiary of the Canadian Imperial Bank of Commerce in the Bahamas, and has championed the potential for the Maldives to develop an offshore finance sector.
“If you look at the world’s emerging economies, which are moving West to East, our proximity to India and to a lesser extent Sri Lanka, and with direct flights to most South-East Asian cities, should be a huge advantage for us,” he told Minivan News.
“The majority of offshore banking centres do rely on imported people and institutions. They are truly migratory these days. We are in a global economy now where things move overnight, so if you were able to do the things to attract people, it is very, very doable.
“The other thing is having sufficient protection around the business – having a strong regulator, a strong legal system, and probably some degree of monetary protection. If a private bank is bringing dollars into the country, there needs to be some degree of certainty that the dollars can sit in the country quite safely,” he said.
The Maldives Inland Revenue Authority (MIRA) has meanwhile announced a 13 percent increase in bank profit taxes collected in 2010 revenue. The country’s six banks paid Rf 226 million (US$14.65 million) in taxes, it said.